In the era of fast and free, shipping costs are a balancing act for ecommerce businesses. Retailers are expected to meet customer demands (62% of shoppers said they won't consider purchasing from a retailer that doesn't offer free shipping) without the costs significantly impacting your bottom line. To complicate it further, several factors influence shipping costs, from delivery timeframes and zones to package dimensions and weight.
Shipping strategies and partners can help offset the pressure of shipping costs. However, it’s easy for common errors to lead to extra charges and inefficiencies. The best way to combat shipping costs that consume your budget is to understand where pitfalls and mistakes typically occur and how to avoid them.
Common errors that increase carrier costs
The post-purchase experience has become pivotal for shaping customer experience, satisfaction and loyalty. Consumers want efficient deliveries accompanied by seamless interactions. Shipping errors not only lead to cost increases and additional fees for brands but can also delay delivery, affect quality and lead to dissatisfied customers. Here are some common errors to watch for and how to correct them:
Incorrect package dimensions
Inaccurate package weight and dimensions lead to inaccurate shipping quotes. This can play out in a couple of different ways. First, the quoted rate may be lower than the actual cost, leading to additional charges. However, you may incur a shipping correction fee if you have already labeled it. In addition, any package that ends up oversized may be subject to extra fees or dimensional (DIM) weight charges, further increasing the shipping costs.
To avoid extra costs and fees, use tools that provide precise measurements. This can be anything from rulers, tape measures, digital scales or investing in automated dimensioning systems and a modern WMS to automate and reduce manual errors.
Incorrect address
Just like inaccurate package weight and dimensions, the wrong address often incurs a fee. These fees can be significant. Both UPS and FedEx, the cost averages $18-21 per address correction. This error adds up swiftly.
You can prevent address inaccuracies by implementing address validation tools during checkout to catch errors in real-time. Prompt customers to review and confirm their shipping address before finalizing the order. Maintaining a clean and updated customer database reduces the likelihood of shipping to outdated or incorrect addresses. Finally, provide clear instructions for customers to update their address details and offer customer support for address corrections to further mitigate errors.
Incorrect packaging materials
Saving money upfront can end up working against you. While it may seem cost-effective to use cheaper shipping, it may not work out as planned. Invest in packaging that is optimal for your product. This reduces the chance of damage and returns. Moreover, you can reduce packaging costs in other ways.
The best way to avoid extra shipping fees is to use the right-size packaging and reduce package weight as much as possible. Pay attention to fragile items and make them more secure. Finally, seal packages securely.
Lack of technology solutions
Without technology solutions, shipping costs for ecommerce retailers can increase because of inefficiencies in order processing, inventory management and fulfillment. Manual errors are more likely to occur without automated systems, resulting in mispicked or mispacked orders, inaccurate inventory counts and delayed shipments. Outdated technology may not provide real-time data insights, making optimizing shipping routes and negotiating favorable carrier rates challenging. As a result, retailers may incur higher shipping expenses due to operational inefficiencies and missed cost-saving opportunities.
By implementing the right technology solutions, businesses can automate systems and minimize order picking and packing errors, leading to fewer returns and reshipments. Advanced analytics tools provide real-time insights into shipping patterns and carrier performance, enabling retailers to negotiate better rates and choose the most cost-effective shipping methods. Integrated shipping software automates label generation and streamlines shipment tracking, further reducing labor costs and improving overall shipping efficiency.
Not diversifying carriers
Relying solely on one carrier can increase shipping costs due to limited options for rate negotiation and service flexibility. If that carrier experiences disruptions or service issues, your shipping operations may suffer, leading to additional expenses to rectify the situation. Diversifying carriers allows you to leverage competitive pricing and service offerings, mitigating the impact of carrier-specific challenges and optimizing overall shipping costs.
Invoice mistakes
Invoice errors can leading to overbilling or underbilling for services rendered by carriers. Overbilling occurs when incorrect rates or surcharges are applied to shipments, resulting in higher charges than necessary. Conversely, underbilling may occur if discounts or negotiated rates are not properly applied, leading to missed savings opportunities. These errors can result in financial losses and inefficiencies, ultimately driving up shipping costs for businesses.
To avoid shipping invoice errors:
- Regularly audit invoices: Conduct regular audits of shipping invoices to identify any discrepancies or errors.
- Verify negotiated rates: Ensure that negotiated rates with carriers are accurately applied to shipments.
- Implement automated systems: Use automated shipping and billing systems to streamline the invoicing process and minimize manual errors.
- Train staff: Provide training to staff members involved in the shipping process to ensure they understand billing procedures and can identify potential errors.
- Communicate with carriers: Maintain open communication with carriers to address any billing discrepancies promptly and resolve them efficiently.
How a 3PL can help you optimize shipping costs
Today’s retailers can partner with 3PLs that help them optimize shipping costs. The right 3PL service allows you to:
- Leverage expertise, network and technology: 3PLs have specialized knowledge and experience in shipping logistics. They can utilize their network of carriers and advanced technology to find the most cost-effective shipping solutions.
- Negotiate competitive shipping rates with carriers: 3PLs often have established relationships with shipping carriers and can negotiate better rates on behalf of their clients due to their high shipping volume.
- Access discounted shipping rates: Through their partnerships and volume discounts, 3PLs can offer their clients access to discounted shipping rates that they may not be able to obtain on their own.
- Optimize shipping routes and modes: By analyzing shipping data and leveraging technology, 3PLs can optimize shipping routes and modes to minimize costs while ensuring timely delivery.
- Use advanced shipping analytics and reporting: 3PLs provide detailed analytics and reporting tools that help businesses track shipping costs, identify areas for improvement and make data-driven decisions to optimize their shipping operations and reduce costs over time.
Partner with Cart.com to optimize your shipping costs
Cart.com offers you expert omnichannel fulfillment and supports your shipping operations with a best-in-class WMS. Discover cost-effective shipping routes that meet your delivery deadlines using our advanced rate shopping and transportation management tools. Benefit from our extensive network of carriers to secure optimal savings on parcels of varying dimensional weights. Our collaborative approach ensures that we explore the best solutions and rates across the entire supply chain, going beyond last-mile carrier pricing. Contact our team today to find out how we can help your brand optimize your shipping processes and more.
